Reply To: ROTH withdraws

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#4891
Alan S.
Participant

You will receive a 1099R reporting the gross distributions for 2019. If you have reached 59.5 at the time of your distribution, your Roth will be fully qualified and tax free and you will not have to file Form 8606. You will just enter the gross distribution on line 4a of Form 1040. This is very simple.

However, if you are under 59.5 you will have to file Form 8606 to report your distribution and will have to know your regular contribution basis and your conversion basis to complete the form. Your regular contributions comes out first, then your conversions come out in the order you made them. As long as you do not withdraw more than all these contributions, your distribution will be non taxable since any earnings come out last and you will only have a taxable amount if you reach your earnings. If you reach your earnings you will also owe a 10% penalty on the earnings amount.

So much easier if you are 59.5 because you will not have to determine the amount of all your past contributions and conversions. If you have not been tracking those amounts and are under 59.5, this could amount to a challenging research project.